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Commenting on the first of these points, Mr Manzie said that it was difficult to be sure of Chinese intentions particularly at a time when they were reviewing all large projects. But the fact that CLP would be taking a major proportion of the electri- city produced by the Guangdong project, and would pay for it in convertible currency, gave the project a strong advantage over others. The UK had had varying advice, like France, but had heard nothing to suggest that the Guangdong project was not likely to go ahead. As regards the type of contract whether there would be a negotiated contract, international tenders or some- thing else - the position was not clear. But CLP had chosen the negotiated contract route for large-scale projects in Hong Kong and there seemed a good chance that the UK and France together might secure a negotiated contract in Guangdong. As regards Alsthom, Mr Manzie reiterated that if the Chinese insisted on separate intemational tenders there could clearly be no joint proposal. M Esper had referred to the GEC/Framatome discussions. The British government, too, had no serious objection to their continuation, though they would need to know more about the details. It was clear that further commercial negotiations would be needed. Mr Manzie noted that the firms envisaged that any agreement which they reached would have the approval of the two governments. This was one of the reasons for the present discus- sions.
11. M Esper said that as the result of talks at the political level with the Chinese the French had obtained an undertaking that there would be a "French solution" for the first nuclear power station in China. French interests might well be best served if the Chinese reached an early decision to proceed with Guangdong (rather than Shanghai or (?) Yao Wan) but they could not press the Chinese to choose Guangdong.
12. M Esper recognised that CLP would have some influence over Chinese decisions. But even if CLP preferred a negotiated con- tract it was not certain that they would be able to prevent the project going to international tender. The French had conflic- ting information on what the Chinese preference was likely to be. They were nevertheless ready to envisage an agreement between Framatome and GEC. Such an agreement would be easy to draw up if the Chinese chose a negotiated contract. Mr Esper understood that the firms envisaged that there might be some sub-contracting from Framatome to UK firms and from GEC to French firms. The French government had no objection to this indeed it would be welcome if it resulted in work for Alsthom: while this was not essential it would make it easier to contem- plate a proposal in which Alsthom was not directly involved. There was an official agreement which obliged Framatome and Alsthom to work together in export markets and a partnership between Framatome and CEC would be an exception to the normal mile. M Esper added that even if the Chinese decided against a negotiated contract there might still be a joint proposal and the French side would be willing to examine the possibil- ities. Mr Manzie referred to M Esper's remarks about discussions